TCS investors not showing any loss of confidence as it pauses to catch its breath

TCS trailed the broader market today. On a longer term basis, investors in TATA CONSULTANCY SERV LT made +0.08% per day. Tuesday's performance of -0.69% was a underperformance compared to it's daily average.

TCS showed a strong bullish trend over the last 3 months. During this period TCS increased by +20.27% . There was a long signal during this period which returned +20.27%.

Trend

Monthly Performance

Alpha (outperformance)

Heatmap

Volatility

Return distribution

TCS has been outperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 17 Jul, 2017 to 24 Sep, 2018. Over the last 2 years and 9 months, TCS outperformed the NIFTY-50 index on 51% days.

During the last three months TCS was mostly profitable and delivered on average +0.3% per day. It's best return during this period (of +5.6%) was on Wednesday, 11 Jul, 2018. While it's worst loss in the same period (of -1.66%) was on Tuesday, 11 Sep, 2018. The longest stort-term trend during this period was 7 profitable days, which started on 8 Aug, 2018 and went on till 17 Aug, 2018. This bullish trend returned +2.29% to investors.

During the last year TCS had 9 profitable months and 3 loss making months. TCS returned profits in more months than NIFTY-50 index. TCS significantly outperformed NIFTY-50 index in Apr 2018, when it returned +21.67% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. TCS had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from Oct 2017 to Jan 2018) during which period it delivered +29.46%. It is interesting to note that both TCS and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Try not to become a man of success. Rather become a man of value.
-- Albert Einstein

TCS is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing increase in volatility. During the last three months, there was a significant surge in TCS's volatility from 25 Jun, 2018 to 25 Sep, 2018. While there was a significant surge in the NIFTY-50 index's volatility from 21 Aug, 2018 to 25 Sep, 2018.

Advanced/professional short-term investors should note that TCS has significant positive skewness in it's return distribution. This indicates that investors can expect TCS to recover from drawdowns quickly. Which makes TCS a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in TCS derivatives at this moment can consider 'Calendar Spread' options strategy to receive better risk-adjusted returns.

TCS has more chance of extreme outcomes than the NIFTY-50 index. Therefore, TCS must receive a lower allocation than NIFTY-50 in your portfolio. NIFTY-50 index usually has shorter drawdown period than TCS.

Based on your interest in TCS you may find it interesting to know that RESPONIND, VIPIND and KPIT are small caps that have all shown remarkable performance and qualify to be on every investor's watchlist.